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Some Important Information About Federal Tax Liens

A federal tax lien is a legal claim by the federal government against a taxpayer's property when he or she neglects or fails to pay a tax debt. After the IRS assesses liability by listing a balance due in its records and sending the taxpayer a Notice and Demand for Payment, it may encumber a taxpayer's property with a federal tax lien. The IRS files a public notice known as a Notice of Federal Tax Lien to notify creditors and other parties in interest that the federal government possesses a legal right to a taxpayer's property.  

A federal tax lien attaches to all of a taxpayer's assets such as real property including a personal residence or investment property. It also attaches to personal property such as bank accounts, securities, and motor vehicles. It even attaches to future assets acquired during the duration of the lien.

The filing of a Notice of Federal Tax Lien may also limit a taxpayer's ability to obtain credit. If a taxpayer is a sole proprietor, the lien may attach to all business property and to all rights to business property, including accounts receivable. Also, as mentioned in many of our website's blogs, even if a bankruptcy case is filed, a tax debt and lien may continue after the filing and completion of a bankruptcy case.

It is important to note the distinction between a tax lien and a levy. The former secures the government’s interest in property when a tax debt is not paid. A levy actually seizes or takes the property to pay the tax debt. It is important that taxpayers pay or make arrangements to settle their tax debt as the IRS may levy, seize and sell any type of real or personal property in which a taxpayer owns or has an interest.

Please see future blogs for more information on how a taxpayer may deal with and resolve federal tax liens.

At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to the payment of their debts. The experienced South Florida defense attorneys at Loan Lawyers are here to help you if you have excessive debt, including tax debt. To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).
  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
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